Explanatory note

Subsection (1) of section 649 of the Income and Corporation Taxes Act 1988 provides that where, under Part I of the Social Security Act 1986, the Secretary of State pays minimum contributions for the purposes of approved personal pension arrangements, the employee’s share of those contributions shall, instead of being the amount provided for in that Part, be“the grossed up equivalent” of the amount so provided for; and by subsection (2) of that section“the grossed up equivalent” of such an amount is such sum as, after deduction of income tax at the basic rate for the year of assessment for which the contributions are paid, is equal to that amount.

These Regulations, which come into force on 1st July 1988, provide for the recovery by the Secretary of State from the Commissioners of Inland Revenue (“the Board”) of any increase attributable to section 649 of the Income and Corporation Taxes Act 1988 in the sums paid by the Secretary of State out of the National Insurance Fund, require the Secretary of State to give information to the Board and make provisions supplementing section 649.

Regulation 1 provides for citation and commencement and regulation 2 for interpre- tation.

Regulation 3 provides that the Secretary of State shall recover from the Board any increase attributable to section 649 in the sums paid by him out of the National Insurance Fund from moneys advanced to him by the Board.

Regulations 4 and 5 provide that the Secretary of State shall give to the Board prescribed information.

Regulation 6 provides for the recovery by the Board by assessment of amounts representing income tax at the basic rate on certain amounts paid by the Secretary of State from persons to, or in respect of, whom such amounts were paid.

Regulation 7 provides for the construction of references to the Secretary of State and the National Insurance Fund in relation to Northern Ireland.